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Freight Railroads:

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Title: No Slide Title Last modified by: tcw Created Date: 9/29/1997 6:40:06 PM Document presentation format: 35mm Slides Company: Assoc of American Railroads – PowerPoint PPT presentation

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Title: Freight Railroads:


1
Freight Railroads Moving America Forward
Association of American Railroads March 2,
2009
2
  • Americas demand for safe, affordable, and
    environmentally-
  • responsible transportation has never been greater
    than it is today and that demand will grow in
    the future.
  • Railroads are the most sensible way to meet this
    demand.

3
Efficiency From Coast to Coast
4
The Leader in Freight Transportation
(ton-miles)
Railroads
Trucks
Water
Pipeline
Pipeline excludes natural gas. Source U.S.
DOT
5
Why Freight Rail? Fuel Efficiency
  • ? Move a ton of freight 436 miles per gallon.
  • ? Three times more fuel efficient than trucks.
  • Since 1980, double the freight on same amount of
    fuel!

6
U.S. Greenhouse Gas Emissions
Why Freight Rail? Lower Greenhouse Gases
? Moving freight by rail instead of truck reduces
greenhouse gases by two-thirds or more. ?
Diverting 10 of long-distance truck traffic to
rail would be like taking 2 million cars off the
road or planting 280 million trees.
Everything Else 99.3
Freight Rail 0.7
Source EPA
7
Why Freight Rail? Less Highway Gridlock
  • One train does the work of 280 (or more) trucks.
  • That means less highway gridlock and lower
    highway spending.

8
Why Freight Rail? Keeping Goods Affordable
Inflation-Adjusted RR Rates Down 54 Since
1980!
Average revenue per ton-mile, Class I railroads.
Source AAR
9
Expected Traffic vs. Capacity
10
What Are Railroads Doing to Increase Capacity?
  • ? Massive equipment and infrastructure investment
  • ? Enough people for the job

? Cooperative alliances ? Improved operating
plans ? Technology
11
39 Billion Gap Between What RRs Can Afford and
the Capacity We Need
135 billion in infrastructure expansion by 2035
Class I railroads only. Source Cambridge
Systematics
12
RRs Have Far Higher Capital Intensity Than Most
Other Industries
Capital Expenditures as a of Revenue Avg.
1997-2006
Class I RRs
Computers
Avg. All Mfg.
Wood Prod.
Petrol. Coal Prod.
Plastics
Nonmet. Minerals
Food
Motor Vehicles
Chemicals
Paper
Sources U.S. Census Bureau, AAR
13
Railroads Spend More Than Most State Highway
Agencies!
Class I Railroad Spending on Infrastructure vs.
State Highway Agency Spending - 2006 (
billions)
Capital outlays plus maintenance expenses.
Sources FHWA Highway Statistics Table SF-12
AAR
14
RR Profitability is Below AverageEven in Era of
Record Profits
Return on Equity Railroads vs. All Industries
Source Value Line
15
Tax Incentives Are a Smart Choice to Bridge the
Funding Gap
  • ? 25 tax credit for projects that expand rail
    capacity.
  • ? 1 in investment yields 3 in economic
    benefits!
  • ? 1 billion in rail investment 20,000 jobs.
  • ? Huge public benefits far outweigh costs.

16
Working Together Public-Private Partnerships
  • ? Combine resources to meet public needs.
  • ? Railroads pay for their benefits, public pays
    for public benefits.
  • ? Examples Alameda Corridor, CREATE, Heartland
    Corridor, National Gateway

17
The Staggers Act Balanced Regulation Works
(Index 1981 100)
Productivity
Volume
Staggers Act Passed Oct. 1980
Revenue
Price
Source AAR
18
Excessive Regulation Would Mean Reduced Capacity
and Service
  • ? Goal lower rail rates for certain shippers
  • Result lower rail revenue, capital drain,
    disinvestment.
  • Would mean less rail capacity and capability when
    we need more.

19
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